VMware hybrid cloud service unlikely to start turf war with providers

Despite directly competing with many of its cloud provider customers' offerings, VMware's new hybrid cloud service is unlikely to damage partnerships.

With the official launch of its long-awaited cloud services this week, VMware became a direct competitor of many of its cloud provider customers. But it appears unlikely that providers will hold VMware responsible for sparking a turf war with the launch of its new hybrid cloud service.

"Privately will some of them be irritated? Very possibly. But the fact is nobody can afford not to support VMware, and there's no reason for VMware to dislodge their current customers who are using Terremark, Rackspace or any other company," said Lynda Stadtmueller, program director of cloud computing services research at Stratecast, a division of Frost & Sullivan. "I think this is a case that shows 'co-opetition' will continue to be the norm in this market."

We'll see whether there's an actual impact on other providers, but at this point I'm not anticipating it really shaking things up

Lynda Stadtmueller, Stratecast

Rumors began circulating last year that VMware was preparing to launch a public Infrastructure as a Service (IaaS) offering under the codename "Project Zephyr," a claim the company repeatedly declined to confirm, even as select customers were invited last month to test it in private beta release. VMware CEO Pat Gelsinger previewed the company's public cloud strategy last month, indicating a focus on hybrid clouds and software-defined data centers. The final product announced this week, vCloud Hybrid Service, is being positioned more as a VMware hybrid cloud enablement service than a straight-up public IaaS offering.

VMware's new offering consists of an IaaS cloud and a complementary self-service portal, called the vCloud Hybrid Service Console, which a customer uses as the primary interface for accessing, consuming and managing VMware cloud resources. Customers can use a simplified wizard in VMware's vCloud Connector software or Open Virtualization Format Tool to connect, view, copy and operate vSphere-virtualized applications across both clouds. Migration capabilities support importing resources to the vCloud Hybrid Service, exporting them from VMware's cloud to the customer's data center and synchronization of templates between the two.

With so many other cloud providers in VMware's Service Provider Program (VSPP) already fiercely competing for customers, one more isn't going to be a significant threat -- even if it that one is VMware, said Pat O'Day, chief technology officer of Bluelock, an Indianapolis-based cloud provider and one of nine providers that have earned VMware's top-tier vCloud Datacenter Services accreditation.

"We're used to having to differentiate and having to focus ourselves on more specific capabilities," O'Day said. "When we learned about this offering and looked at our roadmap, we were like, 'Do we need to change anything?' It was really interesting because the answer was no. We still need to move forward to do what we were going to do originally."

On that roadmap are the recent launch of Bluelock's Recovery-as-a-Service offering and the company's ongoing efforts to fortify its cloud for more advanced deployment scenarios, such as supporting customers with industry-specific security and compliance requirements .

"These are areas where we were intending to invest in and VMware's plans do not change that," O'Day said.

During a press conference announcing VMware's new hybrid cloud service, the company pledged to make the technology and intellectual property available to its ecosystem of service provider partners and integrators. VMware also expects to see providers "develop value-added services on top of this offering," customizing it to support specific vertical markets, geographies or application types, said Bill Fathers, senior vice president and general manager of VMware's new hybrid cloud services business unit.

VMware hybrid cloud pricing suggests cloud-bursting use

VMware is selling its new hybrid cloud service two ways: vCloud Hybrid Service Dedicated Cloud, a single-tenant offering with annual-term pricing starting at 13 cents per hour, and vCloud Hybrid Service Virtual Private Cloud, a multi-tenant environment sold on a monthly basis with pricing starting at 4.5 cents per hour.

"It's a sensible business model. Most enterprises have VMware virtualization in house, and so cloud bursting from it onto a VMware cloud makes sense," said Tom Nolle, president of CIMI Corp., a private consultancy in Voorhees, N.J. "The pricing might reflect the fact that most cloud-bursting apps are for workload overflow or failover, so the duty cycles are less, and also VMware makes money by selling their virtualization tools for use on premises."

It wasn't a dramatic statement, given how many IaaS providers are already headed in this direction to avoid commoditization, Stadtmueller noted.

"VMware is still just [offering] an infrastructure play, and there's so much more [required for] meeting customers' needs," she said. "We'll see whether there's an actual impact on other providers, but at this point I'm not anticipating it really shaking things up."

VMware hybrid cloud service uses common platform

As its name implies, the vCloud Hybrid Service is built on VMware's vCloud platform -- the same software stack its enterprise and cloud provider customers use to build private and public clouds. Because of this, users of VMware's hybrid cloud service don't need to license any new software and can continue using the company's vCenter management tool to manage private and public resources, said VMware's Fathers.

The common platform also means that applications won't require any changes to be replicated or migrated across either environment, and customers can more easily reproduce their security and networking configurations, Fathers added. Additionally, VMware expects that providing customers with a single support organization for public and private cloud environments will be a big selling point.

VMware's transformation into a cloud provider doesn't come with much risk, despite the fact that its experience in service delivery is limited, she added.

"The truth is that a lot of turnkey cloud service providers don't necessarily offer much in the way of customer service," Stadtmueller said. "So much in the cloud world is automated and self-service, so the gap isn't as big as you might think, and VMware has launched more consulting and professional services practices that can augment what they're doing now."

Cloud providers may reap benefits from VMware's move

VMware's hybrid cloud service may not threaten many cloud providers, but the more important thing to note is that it may very well be a boon for them, said Bluelock's O'Day. As VMware's further develops its platform to improve cloud service delivery, those upgrades are likely to trickle down to service provider vCloud Director customers, he noted.

"We're actually excited about it," O'Day said. "We've lobbied for provider-specific capabilities and features, but we've always been competing with [VMware's personnel] resources that were dedicated to the traditional enterprise customer base that VMware has. To me, this helps accelerate drive more attention and engineering hours on capabilities you need to have to offer a public-facing service."

O'Day also expects VMware's vCloud application programming interface (API) to get more support from third-party independent software vendors (ISVs), particularly those specializing in cloud automation and management. Traditionally, ISVs have been slow to develop for vCloud due to the fact that few providers implemented the vCloud API without additional customization.

"If you're an ISV trying to write a piece of software that talks to the vCloud API and you've got a lot of people who put their own secret sauce into something that should be as simple as an API, it was really frustrating," O'Day said. "It wasn't about supporting vCloud; it was about supporting a specific provider â€¦ so the hope would be that this pushes forward the out-of-the-box standard, and the ISV community now has a more consistent target."

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